Nine pharma giants warn Europe risks losing drug innovation and investment as U.S. and China rapidly strengthen their global pharmaceutical positions.

The European pharmaceutical industry is facing new pressure as the chairs of nine major drugmakers warn that the region is losing ground to the U.S. and China in investment, clinical trials and pharmaceutical innovation.

In an open letter issued on September 22, the leaders of pharmaceutical companies including AstraZeneca, Boehringer Ingelheim, Chiesi Group, Ipsen, GSK, Novo Nordisk, Novartis, Roche and Sanofi made an urgent call to speed up clinical trials and increase development of new medicines.

This warning comes at a time when China is getting stronger in the area of pharmaceutical development. The government of China has made it a target to increase their presence in first-in class drugs and their biotech industry has started attracting international attention.

Meanwhile, America is still getting substantial investments in the pharmaceutical sector. According to Europeans, there is over 600 billion dollars’ worth of investments in pharmaceuticals in America and China over the past two years.

Why is Europe falling behind in pharmaceutical innovation?

The figures pointed out in the letter explain the growing worry for European drugmakers. The European share of pharmaceutical research & development was 43% in 1990, which has now shrunk to 31%. The commercial clinical trials conducted by Europe have also declined from 18% to 9% in just ten years, as per the industry leaders.

The data mentioned in the letter explains the reason behind the growing fear among European makers of medicines. In 1990, Europe accounted for 43% of research and development of medicines in the world. However, today it stands at just 31%. Additionally, their share of commercial trials has dropped from 18% to merely 9%.

The leaders also talked about the delayed process for getting new drugs to European patients. They mentioned that about 40% of newly developed drugs do not go to Europe at all, while those that are available do take almost 600 days.

The concerns arise amid efforts by Europe to strike a balance between healthcare expenditure and the encouragement of research and development of drugs. Unlike America, European drugmakers compete in countries where pricing and reimbursement policies are determined by national governments.

What can Europe do to attract more pharma investment?

The company CEOs encouraged the European Union to expedite clinical testing, protect intellectual property and implement what they termed sensible digital policies. They also appealed for budgetary flexibility for EU member nations in terms of healthcare and medicinal innovations.

The European Commission has also suggested a European Biotech Act to improve the biotech industry in Europe. The industry leaders also claim that the national governments should take into consideration issues of healthcare budgeting, the process of drug approval and funding and healthcare system modernization.

However, for the European pharmaceutical industry, the issue is shifting from companies themselves to whether Europe can continue to be a desirable place for drugs to be discovered, tested and invested in against increasing competition from America and China.

Thus, Business Fortune believes that Europe’s pharma future depends on faster innovation, stronger investment, smarter regulation, and improved access to medicines.